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NACS Calls on High Court to Stop Amex from Harming Merchants

Joint amicus brief is calling on the U.S. Supreme Court to bar American Express from using its market power to prevent retailers from sharing card fee information.

December 18, 2017

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​WASHINGTON – NACS joined seven other associations in an amicus brief calling on the U.S. Supreme Court to bar credit-card giant American Express (AMEX) from using its market power to harm merchants and consumers by preventing retailers from sharing information on credit card fees and providing discounts to use lower-cost cards.

The brief filed in in Ohio, et al. v. American Express charges that AMEX’s so-called Non-Discrimination Provisions “restrain competition among card networks, cause merchants to pay them higher fees, and lead to increased prices for all consumers whether they pay by card, cash, check, or using government benefits.”

The Supreme Court agreed to hear the case in October after the U.S. Court of Appeals for the Second Circuit reversed a February 2015 District Court ruling that AMEX’s rules violated federal antitrust law. The U.S. government and 19 states had originally sued AMEX, along with Visa and MasterCard, over their so-called “steering rules.” Visa and MasterCard settled with the U.S. Justice Department and eliminated the rules in 2010.

The amicus brief alleges that the AMEX rules allowed the company to gain $1.3 billion in incremental pre-tax income through rate increases between 2006 and 2010, while depriving cardholders from the opportunity to choose to benefit from incentives—including discounts—from merchants that might exceed the rewards associated with use of their credit cards.

“Information is power, and preventing merchants from sharing useful, money-saving information with consumers only adds to the already immense market power acquired and long abused by the credit card giants. The Supreme Court has an opportunity to strike a blow for competition by barring American Express from using that power to benefit itself by reducing choice for consumers while driving up costs for merchants,” stated Lyle Beckwith, senior vice president of government relations for NACS.

The other associations joining in the amicus filing were the Retail Litigation Center (RLC), National Retail Federation, the Food Marketing Institute, the National Grocers Association, the National Association of Shell Marketers Inc., and the Retail Industry Leaders Association.